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ELLIOTT WAVE ANALYSIS - Latest Market Commentary

Stock Indices

Wednesday’s reversal upswing for the S&P from Tuesday’s low of 2063.52 was instrumental in confirming the ongoing bullish five wave impulse development unfolding from the Dec.’14 lows. The subsequent advance to 2110.60 has been large enough to overlap the initial preceding decline from this month’s high of 2132.82, invalidating an otherwise bearish five wave impulse pattern – good news for the bulls. Once again, the probability of continued advances during ###the next couple of months has been reaffirmed. The amplitude of the early-July upswing from 2044.02-2132.82 is large enough to become the smaller first wave within a larger 3rd within the five wave structure that began last December. Basis this measurement, the S&P is on target to our original levels of 2241.53+/-. Intriguingly, the Dow Jones (DJIA) five wave impulse advance began a little later at January’s low of 17037.70. For the Elliott Wave purist, this difference is important in the synchronisation of pattern development with the S&P, assisting the process of correctly identifying the ongoing price action. Ultimate upside targets remain towards 19000.00+/-. In Europe, the five wave expanding-impulse patterns unfolding higher from the Oct.’14 lows remains our ‘proxy’ archetypes in forecasting continued advances during the next couple of months. The Eurostoxx 50 has completed a minimum retracement pullback from this month’s high and is ready to begin a 3rd wave upswing – this is duplicated in the same sequence for the Xetra Dax. Ultimate upside targets are still +17% per cent above current levels. In Asia, the Shanghai Composite held our downside support levels at 3537.35 earlier this week whilst India’s Nifty 50 formed an important retracement low at 8292.00 and is already resuming higher. Japan’s Nikkei is holding just beneath this year’s highs but is expected to accelerate higher during the next week or two whilst Australia’s ASX 200 is already resuming its uptrend that began late-June with targets above the April highs. 30th July 2015

Financial Updates Currencies

Currencies (FX)

In our last report, we confirmed reversal-signatures for both the US$ index and the Euro/US$. This meant that both had completed double zig zag counter-trend corrections – the US$ index at the July high of 98.15, the Euro/US$ at the equivalent 1.0809 low. Price action during the last two trading sessions however has almost returned to these price levels. As the fib-price-ratio measurements ###for the double zig zags are very reliable and solid, the only explanation for this price behaviour during the last days is that the double zig zag patterns will extend into rare triple sequences. In this report, we feature the idealised target levels for these triple zig zags as well as precise negation levels that would signal we have to revert to the double zig zag scenarios which would imply the risk of an immediate downside (US$ index) or upside (Euro) acceleration. Sterling has nudged above its early-July high of 1.5676 and thereby corroborated its upward tendency. Very short-term however there is the risk of a sudden sell-off as the finalising part of an expanding flat sequence. Downside support is at 1.5415+/- to stall this expected decline – upside acceleration to follow. Meanwhile, US$/Yen is picking up momentum in its current advance. Seen from the larger picture, this is exactly what was expected as a 5th wave within an ending expanding-diagonal is unfolding. Although the subdivisions of these patterns are taking the shape of corrective sequences, the momentum involved can be surprising. Idealised upside objectives towards the 127.00-50+/- area are maintained and corroborated on a shorter-term chart. 30th July 2015

Financial Updates Bonds

Bonds (Interest Rates)

The Federal Reserve’s FOMC meeting was concluding with remarks that the U.S. economy and the employment conditions continued to strengthen. This was a marked improvement in the language following the June meeting when they voiced concern about the labour market. This latest upbeat appraisal of the U.S. economy sent stock markets higher and the US$ dollar stronger late Wednesday### and into the beginning of Thursday’s session. Long-dated yields traded lower as the latest Q2 ’15 U.S. GDP data came in at +2.3%, down from expectations of +2.9%. The US10yr yield gained from recent lows earlier this week of 2.207 to 2.320 but reversed lower again, breaking its upward momentum whilst isolating this preceding upswing as a three wave corrective pattern. In the short-term, this increases the probability of a break below 2.207+/- with downside targets to 2.115%. However, the medium-term uptrend remains intact whilst holding above 1.798. In Europe, our benchmark DE10yr yield has just broken below last week’s lows to confirm downward continuity with next support around 10bps below current levels targeting 0.513%. We expect a downside test during the next week but ending a counter-trend zig zag which dates back to the early-June high of 1.062. A reversal signature from 0.513 would then signal the resumption of the medium-term uptrend. 30th July 2015

Commodities

The merry-go-round of investment bank forecasts continues – Headline News: Goldman Sachs remains bearish but states that $1050.00 is nearby support - Perth Mint Treasurer Nigel Moffatt predicts gold down to $1000.00 (please get in line!) – ANZ Bank predicts prices down to $1020.00 – Citibank forecasts levels to $1000.00. From this latest count, we can see that there is bearish consensus that prices will continue to decline to $1000.00+/- or even lower – Morgan Stanley### have reiterated their bearish forecast to $800.00 whilst the lowest forecast so far comes from Deutsche Bank with expected levels down to $770.00. In another example of bearish sentiment overkill, academics Claude Erb and Campbell Harvey have updates their original bearish forecast of gold from a couple of years ago with revised downside targets to $350! This was accompanied by analyst forecasts for silver – one said it would take 20 years to form the next major low. An overwhelming bearish consensus like this, concentrated into a short space of time together with the frequency of published announcements together with extreme views at a time when Fund Managers hold the lowest holdings of Gold and Silver for over ten years provides compelling evidence that prices are approaching MAJOR LOWS! So far, no reversal-signature is evident from the price action low of 1077.25 but short-term evidence is bullish basis a five wave upswing visible from the low to 1105.41. This suggests continued upside activity to at least next resistance at 1123.00+/-. If this level can be exceeded, then it would go a long way in confirming a major low is behind us. Silver would be expected to follow gold under these conditions. Crude oil remains weak with the energy sector lagging behind metals and agricultural commodities. Our latest Elliott Wave count maintains price declines below the March lows. 30th July 2015

LATEST ARTICLES

THE ‘INFLATION-POP’ - PRECIOUS METALS SET TO SURGE INTO RECORD HIGHS

Bloomberg hosted a Precious Metals Forum on 23rd May and WaveTrack International was invited to present our latest Elliott Wave price-forecasts. The event was sponsored by the CME Group and Johnson Matthey.

OUTLOOK & FORECASTS FOR 2013

Highlights:

  • The 2013 outlook for global stock indices and commodities remains very bullish and is entering the last stage of the ‘inflation-pop’ phase that originally began from the post-financial crisis lows of 2008/09
  • This is expected to ignite another period of asset buying that increases risk-on multiples by a minimum 45% per cent and in some cases as much as +300% per cent, sending some global stock indices and commodities into record highs
  • Shorter-term, there is a danger of a downward adjustment of -5-8% per cent, but then sharp price advances to resume
  • Commodity related stock indices and equities are expected to outperform as a sector during the next 12-16 months
  • Banking stocks to participate, but most will not exceed their pre-financial crisis highs

As always, this year’s Outlook & Forecasts for the next twelve months are created applying the Elliott Wave Principle for the assessment of pattern and price amplitude, also Cycle Analysis for the timing of the larger trend reversals. Not always do they jive, but they seldom contradict and more often, provide valuable insights into one or two variations of a similar theme within a seemingly unlimited amount of possibilities.

Even though this report outlines the price expectancy of all asset classes for 2012 it will also illustrate how this coming year fits together into the larger picture. The reasoning behind this is to move away from the 'black-box' stereotype and show you why the results relate to their specific outcome. Overall, this report deals with two different time-periods – long-term and inter-mediate term. Long-term refers to the uptrends from the Great Depression of 1932 onwards and inter-mediate term for the coming year and into 2013.

HOW TO INTERPRET EACH ELLIOTT WAVE CHART

What do you see when looking at an Elliott Wave chart? Just lots of numbers & letters overlaying the price data? – or do you see definable patterns that are immediately familiar? And how do you interpret the results of the analysis and put it into an effective trading plan? Read on and test your own knowledge of these subjects and much more...

A COMMODITY SUPER-CYCLE?

Recent reports of a Commodity Super-Cycle grabbed my attention for two reasons – first, this is diametrically different to the outlook I foresee developing during the next decade, and second, this terminology has surfaced at a time when various commodities have already undergone large percentage gains measured from the Feb.'09 lows

THE 'DEFLATIONARY SCENARIO'

The primary theme of this presentation focuses on a 'Deflationary' outlook, forecast as the dominant aspect continuing during the next decade. This is derived from analysing the Elliott Wave pattern structure of the CRB (Cash) Index during its expansionary period of the last 76 years.

THE 'FLASH CRASH'

The Update Alert! messaging service of EW-Forecast Plus responded to the sharp collapse and the following recovery of US stock indices during the volatile trading session on the 6th May.

OUTLOOK FORECASTS FOR 2011

This analysis centres around the S&P 500 that is used as a proxy for other global indices. The great bull market beginning from the 1932 low ends 68 years later in 2000 - other global indices peaked later in 2007 (75yrs) – some still continuing to progress.

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TESTIMONIALS

"I just wanted to congratulate you on the EW-Compass reports launch. I'd say all the work you've all put into this project is well worth it… never cease to be amazed by the harmony that you find between the fib relations you highlight and the Elliott count you propose. You are a true descendant of RNE, and I'm quite sure he'd have really loved to see your work… Another aspect that sets you apart is your deep knowledge of the how and why of pattern relationships between higher & lower degrees of the same price action. So much to learn there". - T.S.

ELLIOTT WAVE PATTERN

INTRODUCTION TO THE WAVE PRINCIPLE

The Wave Principle, often referred to as Elliott Wave is a unique methodology that applies Natures Laws, those encompassing the Natural Sciences and Universal Geometric Philosophies to the financial markets. It allows us to view price fluctuations as an organised process that can be non-linearly extrapolated to gain a glimpse into the future direction of trends, counter-trends and amplitudes on any market or contract traded around the world.

Expanding Diagonal Patterns - Do they actually exist? - Elliott's inclusion of the Contracting Diagonal

In R.N.Elliott's original treatise of "The Wave Principle (1938)", he introduces us to diagonal patterns for the first time on page 21. Under the heading, Triangles, Elliott describes the difference between horizontal triangles that represent hesitation within an ongoing, progressive trend and diagonal triangles that form the concluding 5th wave of a larger five wave sequence.

NEWS & EVENTS

Tradersworld Online Expo #12 – Starts 12th November 2012

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 12th Trader Expo held online for 7 weeks starting on 12th November 2012 and ending in the new year on 6th January 2013. Peter’s presentation is entitled “Elliott Wave Price Forecasts & Cycle Projections – Three Phases of the 18 Year Bear Market ~ ‘Shock–Pop–Drop’” for more information visit http://tradersworldonlineexpo.com/

Announcement: 123rd Battery Council & Trade Fair Convention in Miami, 1-4 May 2011

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 123rd Trade Fair Convention of the Battery Council in Miami, 1-4 May 2011. Peter’s presentation is entitled "The Historical Price Trend of Lead and Applying the Elliott Wave Principle to plot its course into the Future".

ELLIOTT WAVE PRICE-FORECAST UPDATES